Analyst: Zune Phone coming in next two months

The Zune Phone rumors are back in full force, though this time it's an analyst …

Jefferies & Company analyst Katherine Egbert told her clients last night that Redmond is getting ready to launch a phone based on Windows Mobile 7. "Our recent industry checks indicate Microsoft will be debuting its own phone sometime in the next two months," Egbert said. "We expect the new phone to debut soon, at either the Feb 15-18 Mobile World Congress conference in Barcelona Spain, or possibly at CTIA in Las Vegas one month later."

Egbert says the company is "partnering with a few OEM manufacturers," similar to what Google has done with the Nexus One, to create a Zune-like phone which will have 720p HD video capabilities, at least a 5MP camera, and that will run Windows Mobile 7. She also notes that Windows Mobile 7 will include "premium mobile services," including a Zune video store and music subscription and purchasing services. It will have an interface "similar" to the Zune HD UI, "and could include social networking apps like Xbox Live, Facebook and Twitter," she writes. "We don't have any information about the cost of the Pink phone, nor do we know what service providers might be partnered with Microsoft," she admitted.

"Revenue from the phone is also very unlikely to be meaningful for many years," she believes. Her reasoning for the phone is a little odd though. "However, the new phone might explain why Microsoft has allowed WinMo to dwindle to less than 10 percent mobile OS market share. Pink would be the 'third screen' (after Windows and Xbox) and [the] final component in Microsoft's '3 screens and a cloud' strategy."

If she's right, Microsoft would be fulfilling the dreams of Zune fans, Windows Mobile fans, and many others who have been waiting for Microsoft to counter Apple's iPhone with its own software and hardware combination, as opposed to just a new version of its mobile OS. Speculation and rumors about a secretive effort known as Project Pink to develop a Microsoft-branded handset have been around for many, many months.

The tidbits mentioned by the analyst have a strong resemblance to recent rumors about a media edition of Windows Mobile 7 that has "Microsoft Zune Phone Experience," and supposedly features HD video, a Zune-like music player, and streaming media, as well as Silverlight, Mediaroom, Xbox Live (possibly gameplay), Facebook and Twitter interfaces (similar to Xbox), and Zune Music integration. The media edition doesn't refer to a single "Zune Phone" though, and the latest rumors say it's coming in 2011.

Each time rumors about a Zune Phone spring up, Microsoft is quick to knock them down, insisting that it is only interested in the mobile OS business, not competing with hardware manufacturers. Officially, the company insists that releasing its own branded smartphone would be contrary to its strategy of offering just the operating system to a number of partners who then provide various hardware options so that consumers can have a myriad of devices to choose from. Earlier this month, Microsoft Entertainment and Devices President Robbie Bach bashed Google for its move with the Nexus One, saying that handset makers may fear the company will prioritize its own product over theirs and ditch Android as a result.

What an odd world, where we have no idea when Microsoft is going to release something (with the rumour article here on Ars giving "by September 2010", "sometime in 2011" and 6.6 coming in Feb and now this article saying 2 months away).

It seems to me a little harsh to say Bach "bashed" Google. I'd say he elbowed them lightly while leaving Microsoft lots of room to make the exact same move in the future. Or maybe he didn't want to be struck by PlaysForSure lightning.

Is there any indication that having "HD" on the new Zune has been a compelling feature for anyone? IIRC, in order to even export HD video out of the Zune, you need a not so insignificantly priced adapter. And it doesn't seem like too many people are all that excited over plugging their Zune into someone else's system just to play a video.

It would be hilarious if Microsoft made another attempt to steal Apple's thunder by introducing a new phone right before the official launch of their new tablet. The new Zune HD intro really drew away customers from the iPhone 3GS.

In response to the detractors here, I will say that there are (a very small amount of) those of us in the world who despise iTunes (lack of) functionality on a Windows-based system and would rather have a completely integrated experience with our Windows OS and our media player (and our phone, now).

Microsoft attempts to market to us, even though it's an abyssmal failure each time for them as a company. The products work, and they work well, and they're well-liked by those in our niche market who buy them (typically...there was the whole Zune2K debacle that pissed a lot of folks off).

At any rate, I'm just trying to state my utter pleasure with Microsoft for still marketing to us even though it costs them a lot of money. I appreciate it.

And all the Apple/Mac people out there laughing at Microsoft over this have loads more experience than any Windows user with being laughed at for trying to compete uselessly in a completely dominated market.

Yeah, I don't actually like their products much, but I'm glad Microsoft is still making a go at it. More companies in the mix is generally better for everyone. Maybe this time they'll really hit it out of the park, or at least provide enough unique features that they keep their competitors from getting complacent.

I would think it is more likely that MS is working with the manufactures to make sure there are phones that can really show off there new os. The idea is along the line of there ms store where they will have the best currently produce machines in each segment.

So Zune will become the new "Plays For Sure"? Multiple manufactures and cellphone companies tied into the same DRM system- sounds like a recipe for problems. What happens when your cellphone company or manufacturer (depending on how the contracts work) wont update or patch the OS? Will you get shut out of your XBOX live connection? I don't know, if MS makes the whole thing it will probably work fine, but multiple manufacturers and hardware configurations will be quite a challenge to keep in sync.

Some analyst is smoking crack. Would Microsoft really give the finger to all their business WinMo customers just to pull a surprise consumer move like this? That would be unprecedented and extremely risky, which are not two words one might use to describe MS. It would be Ballmer's last stand with the shareholders, if he approves this.

Originally posted by dlux:Some analyst is smoking crack. Would Microsoft really give the finger to all their business WinMo customers just to pull a surprise consumer move like this? That would be unprecedented and extremely risky, which are not two words one might use to describe MS. It would be Ballmer's last stand with the shareholders, if he approves this.

Not sure if you realized but Zune Marketplace sold drm free downloads before iTunes the only DRM stuff is for Zune pass and they have good reason to use DRM on that kind of thing.

Originally posted by dlux:Some analyst is smoking crack. Would Microsoft really give the finger to all their business WinMo customers just to pull a surprise consumer move like this? That would be unprecedented and extremely risky, which are not two words one might use to describe MS. It would be Ballmer's last stand with the shareholders, if he approves this.

Not sure if you realized but Zune Marketplace sold drm free downloads before iTunes the only DRM stuff is for Zune pass and they have good reason to use DRM on that kind of thing.

I'm not sure if you meant to quote me- I know they sell DRM free tracks, but do you think there will be problems with the Zune pass and movies (which will have DRM) if they try to put this on multiple hardware configurations? I'm not blaming MS, it's the complexity of the DRM that media companies require for streaming and movies.

Originally posted by AdamM:Tell me what makes it a failure? Marketshare?

I could say the same thing about OSX.

Profitability?

Microsoft's focus is utterly misguided if they target the iPhone. They need to start with every smartphone that's NOT an iPhone. At this point, people that want an iPhone are getting one, or their second one.

The other thing MS is going to need to figure out is how they're going to get developers to target the platform. There's already (arguably) 4 solid smartphone OSes out there, each with their own development/app/content ecosystem, and this is not a market that adopts quickly, due to phone contracts and subsidization.

Which leads to the bigger question, which is how much Microsoft is willing to spend on this program, and do they have the stomach to "buy the market" in this economy?

"Traditionally" Windows Mobile was strong in the business segment and that is were they lost ground to RIM and even Apple (according to the latest stats). Besides the Xbox community, people do not really consider MS to be a consumer brand. I would not see such a move to bring business customers back and that makes me doubtful. It would be much easier for them to offer a superior mobile Exchange/Sharepoint/Office experience (even if they have to license these interfaces, others will always be behind) than going for the even more fragmented consumer sector where others have the majority of mindshare.

Originally posted by AdamM:Tell me what makes it a failure? Marketshare?

I could say the same thing about OSX.

Profitability?

Microsoft's focus is utterly misguided if they target the iPhone. They need to start with every smartphone that's NOT an iPhone. At this point, people that want an iPhone are getting one, or their second one.

The other thing MS is going to need to figure out is how they're going to get developers to target the platform. There's already (arguably) 4 solid smartphone OSes out there, each with their own development/app/content ecosystem, and this is not a market that adopts quickly, due to phone contracts and subsidization.

Which leads to the bigger question, which is how much Microsoft is willing to spend on this program, and do they have the stomach to "buy the market" in this economy?

Originally posted by AdamM:Tell me what makes it a failure? Marketshare?

I could say the same thing about OSX.

Profitability?

Microsoft's focus is utterly misguided if they target the iPhone. They need to start with every smartphone that's NOT an iPhone. At this point, people that want an iPhone are getting one, or their second one.

The other thing MS is going to need to figure out is how they're going to get developers to target the platform. There's already (arguably) 4 solid smartphone OSes out there, each with their own development/app/content ecosystem, and this is not a market that adopts quickly, due to phone contracts and subsidization.

Which leads to the bigger question, which is how much Microsoft is willing to spend on this program, and do they have the stomach to "buy the market" in this economy?

Maybe im different but I don't care about a companies profit margin when buying a product the Zune isn't going to work any differently whether Microsoft makes $20 a sale or $100

If it is a touch phone with better browsing than the iphone then I'll buy it. I don't care who makes it.

Sure the iphone games are fun but I could live without them. Most the apps are gimmicky crap that just save you from using google.

I've only heard good things about the Zune from people in the real world. In internet land everyone likes to bash all things Microsoft since half the people that post on sites like this are ABMrs or FOSS advocates.

Originally posted by dlux:Some analyst is smoking crack. Would Microsoft really give the finger to all their business WinMo customers just to pull a surprise consumer move like this? That would be unprecedented and extremely risky, which are not two words one might use to describe MS. It would be Ballmer's last stand with the shareholders, if he approves this.

Have you forgotten that Microsoft bought Danger, the maker of the Sidekick (with disastrous results)?

Heck, when they came out with the Zune in the first place they shut down all of the manufacturers' products that worked with Microsoft's previous Playforsure music store.

Originally posted by Memphis-Ahn:As an European who imported a Zune HD (and is loving the heck out of it) I have to say this is pretty salivating news.

However, the probability of Microsoft releasing this in the EU (or of an import actually working with these crap networks) makes me a sad panda.

Same here! I thoroughly enjoy my ridiculously overpriced (due to being imported via the UK) and functionality-reduced (no chance of buying a Zune Pass, only US credit cards accepted) Zune HD. Where music players go it beats the hell out of any others out there for me. The screen is gorgeous and the touch interface much better than you'd expect from MS.

If MS added GSM radio+Bluetooth+5 MP camera+GPS *and* finally opened up the marketplace to third party developers *and* dropped the US-only cr**, I'd buy it right away! OK, I'd wait for some reviews first, making a phone is a huge leap for MS

For all of you bashing this simply for being MS: you, sirs, are trolls. You get no respect from me. At least wait until the thing comes out (if it ever does), mkay? I mean, Apple isn't exactly the oldest cell phone maker in the world and I don't remember everyone going "drop it, Apple - leave it to the pros like Nokia, Motorola, etc."

Originally posted by AdamM:Tell me what makes it a failure? Marketshare?

I could say the same thing about OSX.

Profitability?

Microsoft's focus is utterly misguided if they target the iPhone. They need to start with every smartphone that's NOT an iPhone. At this point, people that want an iPhone are getting one, or their second one.

The other thing MS is going to need to figure out is how they're going to get developers to target the platform. There's already (arguably) 4 solid smartphone OSes out there, each with their own development/app/content ecosystem, and this is not a market that adopts quickly, due to phone contracts and subsidization.

Which leads to the bigger question, which is how much Microsoft is willing to spend on this program, and do they have the stomach to "buy the market" in this economy?

Maybe im different but I don't care about a companies profit margin when buying a product the Zune isn't going to work any differently whether Microsoft makes $20 a sale or $100

Originally posted by superslav223:If it is a touch phone with better browsing than the iphone then I'll buy it. I don't care who makes it.

Sure the iphone games are fun but I could live without them. Most the apps are gimmicky crap that just save you from using google.

I've only heard good things about the Zune from people in the real world. In internet land everyone likes to bash all things Microsoft since half the people that post on sites like this are ABMrs or FOSS advocates.

Might have something to do with being a one trick pony. Microsoft fails at everything outside of Windows.

Among the many other interesting attributes of being a Mac Fanboy is that they've developed the ability to predict the future. "This phone venture has epic fail written all over it" and comments of that nature crack me up as we're talking about a product that not only hasn't been introduced yet but may not even exist. I've always had trouble visualizing what the Steve Jobs Reality Distortion Field must look like, but I'm guessing it looks something like the portal between universes seen in last season's Fringe. It might actually be interesting to pass into the Apple alternate universe where having any Apple product immediately takes you from loser to uber-cool and makes geeks irrestible to the hottest of women. Regularly holding an Iphone to your face will clear up the worst acne. Typing on a Mac keyboard kicks your IQ up by at least 20 points and improves your writing four grade levels. Music just sounds BETTER coming from an Ipod. And of course the Apple tablet is going to change the world. Inside secret: Apple is secretly developing their own line of tampons which will revolutionize the world of feminine hygeine. Look for them soon in a supermarket near you!

Would love to see something running a rewritten Win Mobile. The specs being tossed around are Tegra/Snapdragon-class processors and chipsets, big OLED screens, 720p out, etc. I don't think they need to make the hardware themselves but perhaps they are raising the bar in terms of requirements so that they can cut down on the underpowered handsets running their OS. I would love to see something like a larger ZuneHD running WM7 and containing the usual radios. So far nobody makes a phone like this really. iPhone may compete if they update the screen but what was once a wow factor a few years ago is now woefully low-res and washed out looking. I don't understand why people need to go apoplectic and start rambling about how the iPhone will rule, etc. Buy whatever platform you like but for fuck's sake, all the competition does is improve all platforms and drive prices down. Do you really want to live in a world with just one option solely for the bragging rights you gain for choosing the winning horse? Do you really all want to have the same thing? Sounds like the most annoying brand of bandwagon marketing.